L.A.’s New Short-Term Rental Ordinance

December 27, 2018

GlobeSt.com

Los Angeles-based land use attorney Andrew Starrels provided GlobeSt.com with in-depth explanations of the city's new ordinance for short-term rentals, which comes in response to the increase in activity in the area and many years of discussion by city officials.

"The impetus was really one of necessity. Short-term rentals...are presently prohibited in most areas of the city. So without the new ordinance, home-sharing activity on platforms [such as Airbnb and Home Away] was technically illegal," Mr. Starrels says.

The ordinance updates the definition of what a short-term rental is: "occupancy of all or part of a residential property for less than a 30-day term." It also places limits on the number of days per year that a host may conduct short-term rental activity to no more than 120 days per year and prohibits a host from using certain restricted properties or operating multiple properties within the city at one time. In addition, the ordinance helps the city collect lodging occupancy taxes by outlining registration and taxation requirements for operators, and provides guidance and peace of mind to landlords and property owners by confirming that tenants cannot engage in short-term rentals or home-sharing of leased property without express consent.

Under the new ordinance, hosting activity will now be permissible as long as they register with the city of Los Angeles and follow the necessary procedures for collecting and paying the applicable taxes assessed on their activities in the same way that hotels and other lodging providers do. While the ordinance says that hosts are ultimately responsible for collecting the tax, Mr. Starrels imagines that hosting platforms will likely collect the tax on behalf of the host.